Source · Select Committees · Public Accounts Committee
Recommendation 14
14
Accepted
Most energy suppliers failed 2022 smart meter installation targets despite binding obligations.
Conclusion
Energy suppliers have binding targets to install smart meters, enforced by Ofgem, the energy regulator. However, energy consumers are not required to accept an offer of having smart meters installed. The Department told us that it chose a voluntary, demand- led approach to the smart meters rollout because it wanted to engage consumers in the way they use energy. It said that in countries that had chosen either a mandatory or semi- mandatory approach it had led to resistance and a lack of engagement with consumers.45 However, in 2022, only one large supplier hit both its gas and electricity smart meters installation targets. This large supplier had a less than one per cent share of total actual installations by all large suppliers.46 Energy UK told us that one supplier considered that in order to meet its targets it would need to convert all consumers who had previously said no to a smart meter.47
Government Response Summary
The government agrees with the committee's observation and states it has already implemented measures through Smart Energy GB to build consumer demand and acceptance, evolving campaign strategies, and expects energy suppliers to invest in innovative incentives, claiming the recommendation is already implemented.
Government Response
Accepted
HM Government
Accepted
1.1 The government agrees with the Committee’s recommendation. Recommendation implemented 1.2 The Department for Energy Security and Net Zero (DESNZ or the department) has set Smart Energy GB clear statutory objectives to build consumer demand and acceptance for smart metering and encourage behaviour change. As an Observer to Smart Energy GB’s board, the department works closely with Smart Energy GB, who continuously evolve their campaign strategy in response to findings from their extensive consumer research (as well as the evolving context of the energy market) so that messaging is tailored to different consumer segmentations. Smart Energy GB work collaboratively with energy suppliers and other stakeholders to help consumers understand the benefits of smart meters and have a specific focus on supporting consumers in vulnerable circumstances. 1.3 Smart Energy GB operate a test and learn approach, so campaigns continually improve. Their campaigns are multi-channel and use a bespoke segmentation model, alongside sophisticated market insights, to target impactful messaging in a cost-effective way. Industry-verified statistical analysis shows that more than 50% of smart meter installations are attributable to Smart Energy GB’s activities. This evidence provides assurance that the existing arrangements to evolving and delivering Smart Energy GB’s public engagement strategy continue to effectively drive demand for smart meters. 1.4 Alongside national and local campaigning from Smart Energy GB, the department expects energy suppliers to invest in and continually evolve their approaches to converting consumer demand into successful installations. Important to this will be their development of innovative incentives to encourage take-up, including by creating attractive new smart-meter-enabled products and services.